3FC3 - Winter 2015 - 1 of 7
Commerce 3FC3
International Finance
Winter 2015 Course Outline
Finance and Business Economics
DeGroote School of Business
McMaster University
COURSE OBJECTIVE
The goal of this course is to examine the factors encountered by finance managers of
multinational corporations in making financing and investment decisions with a global
perspective. It also involves the understanding of the macroeconomic environment governing
international business.
INSTRUCTOR AND CONTACT INFORMATION
Section : Fr 11:30 -14:20
Professor Joy Zhang
Instructor
zhangy57@mcmaster.ca
Office: DSB A210
Office Hours: Wed 17:00 pm – 18:00 pm
Location: DSB 321
Tel: (905) 525-9140 x26173
Class Location: KTH B132
TBA
TA
COURSE ELEMENTS
Credit Value:
Avenue:
Participation:
Evidence-based:
3
Yes
No
Yes
Leadership:
Ethics:
Innovation:
Experiential:
Yes
No
Yes
No
IT skills:
Numeracy:
Group work:
Final Exam:
www.degroote.mcmaster.ca
No
Yes
Yes
Yes
Global view:
Written skills:
Oral skills:
Guest speaker(s):
Yes
Yes
Yes
No
3FC3 - Winter 2015 - 2 of 7
COURSE DESCRIPTION
This course is taught primarily through lectures, readings, assignments and in-class discussions.
By taking this course, you will have a better understanding of exchange rate risks. We will study
the economic determinates of exchange rates, their parity relationships and a nation’s balance of
international payment. We will also talk about the foreign exchange markets and learn how to
use financial instruments to hedge exchange rate risks. We will then discuss how corporations
measure and manage exchange rate exposures in the daily operations. Finally, we will discuss
how corporations evaluate foreign investments and raise capital internationally.
LEARNING OUTCOMES
Upon completion of this course, students will be able to complete the following key tasks:
 Have a good understanding of the major concepts and topics of international finance;
 Be able to apply these concepts;
 Most importantly, be able to think logically and systematically.
REQUIRED COURSE MATERIALS AND READINGS
Avenue registration for course content, reading materials and slides
 http://avenue.mcmaster.ca
Multinational Financial Management, 10th Edition,
by Alan C. Shapiro, John Wiley & Sons, 2013
 purchase a copy at the bookstore
EVALUATION
You will be evaluated based on four components according to the following weights. The
instructor reserves the right to modify the weightings to adjust for more or less material covered
during the semester.
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3FC3 - Winter 2015 - 3 of 7
Components and Weights
Assignment #1
Mid-Term Exam
Assignment #2
Final Exam
12.5%
Numerical and/or essays (group)
30%
Exam (individual)
12.5%
Numerical and/or essays (group)
45%
Exam (individual)
100%
Total
NOTE: The use of a McMaster standard calculator is allowed during examinations in this course.
See McMaster calculator policy at the following URL:
http://www.mcmaster.ca/policy/Students-AcademicStudies/UGCourseMgmt.pdf, page 15
Grade Conversion
At the end of the course your overall percentage grade will be converted to your letter grade in
accordance with the following conversion scheme.
LETTER GRADE
PERCENT
LETTER GRADE
PERCENT
A+
A
A-
90 - 100
85 - 89
80 - 84
C+
C
C-
67 - 69
63 - 66
60 - 62
B+
B
B-
77 - 79
73 - 76
70 - 72
D+
D
D-
57 - 59
53 - 56
50 - 52
F
00 - 49
Communication and Feedback
Students who are uncomfortable in directly approaching an instructor regarding a course concern
may send a confidential email to the respective Area Chair (balvers@mcmaster.ca) or the
Associate Dean (adbusac@mcmaster.ca).
Students who wish to correspond with instructors or TAs directly via email must send messages
that originate from their official McMaster University email account. This protects the
confidentiality and sensitivity of information as well as confirms the identity of the student.
Emails regarding course issues should NOT be sent to the Area Administrative Assistants.
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3FC3 - Winter 2015 - 4 of 7
Instructors are required to provide evaluation feedback for at least 10% of the final grade to
students prior to Week #8 in the term.
Instructors may conduct an informal course review with students by Week #4 to allow time for
modifications in curriculum delivery.
Students who wish to have a course component re-evaluated must complete the following form:
http://www.mcmaster.ca/policy/Students-AcademicStudies/Form_A.pdf
In order for the component to be re-read:





the component must be worth 10% or more of the final grade in the course
students pay a fee of $50 in Gilmour Hall #209 (receipt is then brought to APO)
the Area Chair will seek out an independent adjudicator to re-grade the component
an adjustment to the grade for the component will be made if a grade change of three points
or greater on the 12 point scale (equivalent to 10 marks out of 100) has been suggested by the
adjudicator as assigned by the Area Chair
if a grade change is made, the student fee will be refunded
Assignments
There are two assignments, each of which is worth 12.5% of the final grade. Both assignments
can be done individually or at most with two other partners.
Mid-Term Exam
There is one mid-term examination in this course that accounts for 30% of your final grade. The
examination is to be completed individually.
Final Exam
There is one final examination in this course that accounts for 45% of your final grade. The
examination is cumulative and to be completed individually.
ACADEMIC DISHONESTY
You are expected to exhibit honesty and use ethical behaviour in all aspects of the learning
process. Academic credentials you earn are rooted in principles of honesty and academic
integrity.
Academic dishonesty is to knowingly act or fail to act in a way that results or could result in
unearned academic credit or advantage. This behaviour can result in serious consequences, e.g.
the grade of zero on an assignment, loss of credit with a notation on the transcript (notation reads:
“Grade of F assigned for academic dishonesty”), and/or suspension or expulsion from the
university.
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3FC3 - Winter 2015 - 5 of 7
It is your responsibility to understand what constitutes academic dishonesty. For information on
the various types of academic dishonesty please refer to the Academic Integrity Policy, located at
www.mcmaster.ca/academicintegrity.
The following illustrates only three forms of academic dishonesty:
1. Plagiarism, e.g. the submission of work that is not one’s own or for which other credit
has been obtained.
2. Improper collaboration in group work.
3. Copying or using unauthorized aids in tests and examinations.
REQUESTING RELIEF FOR MISSED ACADEMIC WORK
Students may request relief from a regularly scheduled midterm, test, assignment or other course
component in the following two ways:
a) for missed coursework worth less than 30% of the final grade (and/or absences
lasting less than 5 days); or
b) for missed coursework worth 30% or more of the final grade (and/or absences
lasting more than five (5) days
a) For missed coursework worth less than 30% of the final grade (and/or absences
lasting less than 5 days)
Students must use the MSAF (McMaster Student Absence Form) for their first incidence of
missed coursework worth less than 30% for each term. This is an on-line, self-reporting tool, for
which submission of medical or other types of supporting documentation is normally not
required. Students may use this tool to submit a maximum of one (1) request for relief of missed
academic work per term as long as the weighting of the component is worth 29% of the final
grade or less. Students must follow up with their course instructors regarding the nature of the
relief within two days of submitting the form. Failure to do so may negate the opportunity for
relief. It is the prerogative of the instructor of the course to determine the appropriate relief for
missed term work in his/her course.
If the value of the component is worth 30% or more, students must report to the APO to discuss
their situation and will be required to provide appropriate supporting documentation.
b) For missed coursework worth 30% or more of the final grade (and/or absences
lasting more than five (5) days
Students MUST report to the APO to discuss their situation and will be required to provide
appropriate supporting documentation. If approved, students will be given access to the MSAF
system where they will be required to enter the details of the missed coursework for which they
were approved. Students must follow up with their course instructors regarding the nature of the
relief within two days of submitting the form. Failure to do so may negate the opportunity for
relief. It is the prerogative of the instructor of the course to determine the appropriate relief for
missed term work in his/her course.
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3FC3 - Winter 2015 - 6 of 7
Students who wish to submit more than one request for relief of missed academic work per term
cannot use the online MSAF tool without permission. They must report to the APO and discuss
their situation with an academic advisor. They will be required to provide supporting
documentation and possibly meet with the Manager.
The MSAF cannot be used during any final examination period.
Regarding Midterm Conflicts
Students unable to write a mid-term at the posted exam time due to the following reasons:
religious; work-related (for part-time students only); representing university at an academic or
varsity athletic event; conflicts between two overlapping scheduled mid-term exams; or other
extenuating circumstances, have the option of applying for special exam arrangements. Please
see the DeGroote Missed Course Work Policy for a list of conflicts that qualify for academic
accommodation
http://ug.degroote.mcmaster.ca/forms-and-resources/missed-course-work-policy/
Such requests must be made to the Academic Programs Office at least ten (10) working days
before the scheduled mid-term along with acceptable documentation. Instructors cannot
themselves allow students to unofficially write make-up exams/tests. Adjudication of the request
must be handled by the Academic Programs Office.
If a mid-term exam is missed without a valid reason, students will receive a grade of zero (0) for
that component.
STUDENT ACCESSIBILITY SERVICES
Students who require academic accommodation must contact Student Accessibility Services
(SAS) to make arrangements with a Program Coordinator. Academic accommodations must be
arranged for each term of study. Student Accessibility Services can be contacted by phone 905525-9140 ext. 28652 or e-mail sas@mcmaster.ca. For further information, consult McMaster
University’s Policy for Academic Accommodation of Students with Disabilities.
POTENTIAL MODIFICATIONS TO THE COURSE
The instructor and university reserve the right to modify elements of the course during the term.
The university may change the dates and deadlines for any or all courses in extreme
circumstances. If either type of modification becomes necessary, reasonable notice and
communication with the students will be given with explanation and the opportunity to comment
on changes. It is the responsibility of the student to check their McMaster email and course
websites weekly during the term and to note any changes.
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3FC3 - Winter 2015 - 7 of 7
COURSE SCHEDULE
Commerce 3FC3
International Finance
Winter 2015 Course Schedule
WEEK
DATE
MAIN TOPICS AND DESCRIPTIONS
TEXTBOOK CHAPTER
1
Jan 9
Introduction
Determination of Exchange Rates
Chapter 1 and 2
2
Jan 16
Role of Central Bank
International Monetary System
Chapter 2 and 3
3
Jan 23
Purchasing Power Parity (PPP)
Fisher Effects (FE and IFE)
Chapter 4.1 – 4.4
4
Jan 30
Interest Rate Parity (IRP)
Unbiased Nature of Forward Rate (UFR)
Chapter 4.5 – 4.8
5
Feb 6
Spot Foreign Exchange Markets
Forward Contracts
Chapter 7
6
Feb 13
Futures Contracts
Currency Options
Chapter 8
7
Feb 20
Mid-term Recesses
8
Feb 27
Mid-term Exam: In Class
9
Mar 6
Interest Rate and Currency Swaps
Chapter 9.1
10
Mar 13
Measuring and Managing FX Exposures (Part I)
Chapter 10 and 11
11
Mar 20
Measuring and Managing FX Exposures (Part II)
Chapter 10 and 11
12
Mar 27
International Cost of Capital
Capital Budgeting
International Financing
International Capital Markets
Chapter 12 and 14
13
Apr 3
Good Friday
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